Walt Disney to acquire UTV
27 July 2011
Walt Disney Co plans to acquire the rest of UTV Software Communications (UTV) it does not already own. It intends to delist the company in a deal potentially valued at $454 million, or Rs2,014 crore, in a move that will see the US entertainment giant expand its presence in Bollywood, media and gaming.
The California-based company, with a 50.44-per cent stake in UTV Software, said in a statement it would buy out public shareholders at a price not exceeding Rs1,000 per share, an 11 per cent premium to Monday's stock closing price of Rs901.8. With this buyout, Walt Disney would gain full control over five businesses.
UTV Software, a holding company, is a producer and distributor of movies, broadcasts a clutch of movie and entertainment channels, and is into content production for television and other digital media. It also has a presence in gaming.
The company operates through a number of subsidiaries, including movie production under UTV Motion Pictures, Indiagames, and UTV Global Broadcasting that broadcasts entertainment and movie channels, all of which would form part of Walt Disney's Indian unit with the completion of the transaction.
The company' stock rose 5.39 per cent to Rs950.45, on the BSE yesterday, following the news of the buyout, one of the biggest in the history of Indian media and entertainment industry.
According to Disney, it would also buy the 20-per cent stake held by promoter Rohinton (Ronnie) Screwvala and his associates if it picked up enough shares to delist the company.